Hobbled hedge funder Alphonse “Buddy” Fletcher is presiding over a slow meltdown of Budget Travel magazine, once a proud glossy that is teetering on the edge of collapse.Crain’s New York Business

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Arthur Frommer’s Budget Travel magazine has taken a wrong turn.

The cash-strapped magazine is struggling under the ownership of hedge-fund manager Alphonse “Buddy” Fletcher Jr., who acquired it in 2010 from Newsweek.

Budget Travel’s mounting debts may keep its November-December issue off the newsstands, according to sources. The magazine has been dropped by the company that handles its subscriptions, and it owes hundreds of thousands to its disgruntled paper supplier.

Meanwhile, Fletcher is trying to unload the magazine, but any sale could be complicated by the bankruptcy turmoil that has engulfed his hedge fund, Fletcher International.

Budget Travel and its corporate parent, Intellitravel Media, are part of BRG Investments, which used to be a unit of Fletcher International, said an individual close to the situation. BRG also houses the movie company of Fletcher’s brother, Geoffrey, the Academy Award-winning screenwriter of “Precious.”

BRG’s assets were transferred out of Fletcher International in April, shortly before the hedge fund filed for bankruptcy. The controversial move has drawn scrutiny from both burned investors and the courts.

The transfer was made right after three Louisiana pension funds demanded the return of their $100 million investment and started liquidation proceedings in the Cayman Islands.

According to court documents, Fletcher International gave BRG $16.3 million in June, just before the fund filed for bankruptcy. It isn’t clear that any of that money reached Budget Travel.

Financial terms were never disclosed, but Fletcher is believed to have paid $1 to buy Budget Travel from then Washington Post Co.-owned Newsweek, which purchased it from Arthur Frommer in 1999.

Although it has an unaudited subscription base of 675,000, Budget Travel continues to bleed red ink. Outstanding liabilities are estimated to be about $1 million, according to sources.

In October, CDS Global, which handles subscriptions, cut the magazine off. The website now has a message saying, “Sorry, we’re having technical difficulties with our subscription page.” The magazine is hoping to work out a payment schedule, said individuals close to the situation.

Budget Travel’s paper supplier, AT Clayton, is also owed money, said another source. AT Clayton declined to comment, and CDS Global did not respond to a request for comment.

Fletcher has let the magazine wither, insiders said. The staff has been halved and the frequency was cut to six times a year.

Fletcher has been trying to sell Budget Travel but is unrealistic about what it will fetch, according to sources. “It’s bad news to be tied with him,” said one employee. “We are a victim of being under his management.”

Editor-In-Chief Gillian Telling, the third since Fletcher bought it, declined to comment. Publisher Elaine Alimonti did not return a call for comment. A spokesman for Buddy Fletcher did not respond to a request for comment.